Care home bosses aim to save £10m

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A CARE home group saddled with huge debts has revealed plans to save £10m in the start of tense negotiations with its landlords.

Bosses at Southern Cross say that by switching its 750 care homes across the UK – including three in Ilkeston – to monthly rather than quarterly rent payments, they can save some of the money being paid to its landlords the Qatari Investment Authority.

The GMB union, which represents care home staff told the Advertiser last week that the firm was in ‘severe financial difficulties’ due to ‘sky high rents’ charged for its buildings.

The firm is now in talks with the Government’s Department of Business Innovation of Skills about maintaining proper standards of care for its 31,000 elderly, about 100 of which are residents at Ladywood, Victoria Park and Cedars and Larches care homes in Ilkeston.

Earlier this month Southern Cross said its current rent burden was ‘unsustainable’ and that it intends to step up discussions with landlords

Prime Minister David Cameron said on March 16 that he would ask Minister of Health Andrew Lansley to urgently investigate the matter.

And Minister of State for Care Services Paul Burstow wrote in a letter to concerned MP John Spellar last week: “My officials and those at the Department for Business, Innovation and skills are talking to Southern Cross and KPMG, who are advising Southern Cross on delivering its restructuring plan.

“Officials are keeping a very close eye on the company and the steps it is taking.”

Southern Cross’s chief executive Jamie Buchan, said: “All rental payments by Southern Cross Healthcare will be made monthly, in advance. This change was made in order to standardise payment schedules with all of the company’s landlords, across its 750 homes.”

GMB organiser Martin McGinley said they too will be entering talks with ministers.

“We want to ask what exactly the contingency plans are if Southern Cross and the Government fail to cut the rents and Southern Cross has to go into administration,” he said.

“GMB will impress on ministers that time is running out for the QIA to clear up the financial mess that it and the private equity industry created at Southern Cross and which now threatens to make 31,000 vulnerable and elderly UK residents homeless.”